Sharply higher oil and natural gas coming?

Dr. Michael Economides,
well-known oil expert (and hardcore neocon) predicts $100 a barrel oil
and $20 per McF of natural gas by Christmas. He called $65 a barrel oil
correctly a while back…

Reasons: Katrina and Rita clobbered production, increasing demand in
the US and abroad, not enough refineries, tensions between the US and
major producing countries of Iran and Venezuela, decreased Russian
production, and more.

All these factors have combined to form what Economides called a “perfect storm — a double Category 5 perfect storm”
to drive prices higher. And next month, he predicted, oil companies
will have a major public relations disaster on their hands as they
begin reporting historically high third quarter profits that will be
“obscene even by our obscene standards.”

Story via TheOilDrum

Also from TheOilDrum, this fascinating pdf from DOE detailing the damage.

100% of GOM (Gulf of Mexico production) out, 20% of the country’s refineries down, Henry Hub down.

The Henry Hub is a major transmission line for natural gas in
Louisiana. Natural gas at the Henry Hub is the basis for NYMEX futures
prices, that’s how important the Henry Hub is.

and

That’s the Louisiana Offshore Oil Port,
“LOOP provides tanker offloading and temporary storage services for
crude oil transported on some of the largest tankers in the world. Most
tankers offloading at LOOP are too large for U.S. inland ports.”

Oddly, oil was down Sunday so either the markets are acting
irrationally or there’s major governmental intervention to keep prices
down – an intervention that can’t last long and won’t work.